Wednesday, May 9, 2007

Taxes - How Does The Government Get Money?

Explain the different types of taxes Americans pay. How does the federal government get money? How about the state government? And how do local (city) governments get money? Make a chart and track all of the different ways Americans are taxed. Hint - there is more than one!

Federal Taxes:
Payroll Tax: Collected from wages and salaries only
Income Tax: Collected from wages, salaries, interest from bank accounts, rents, royalties and dividends
Corporate Income Tax: Collected from a corporations net income
Excise Tax: Collected from sales of items
Estate Tax: Collected from a deceased person’s estate
Gift Tax: Collected during the transfer of property between living people

State Taxes:
General Sale Tax: Collected mostly from general sales
Excise Tax: Collected from sales of items such as tobacco, alcoholic beverages and gasoline
Estate Tax: Collected from a deceased person’s estate
Inheritance Tax: Collected from a person after they have inherited something from a deceased person

City/Local Taxes:
Property Tax: Collected from financial and real assets, this includes, stocks, bonds, houses, cars and artwork

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